microloan

This year, when I was still at IBM, I had opted out of the IBM Employee Charitable Fund (ECF) and chose to put cash into Kiva microloans instead. I was tired of just blindly dumping money into some big charity like United Way. I don’t really have any idea what United Way or any other charity is doing with the money I provide.

At the time I had no idea that I wouldn’t be working at IBM for much longer. When I left IBM and started working as a contractor for LzLabs in the spring, having made this switch already made it easy for me to continue doing so. The only change I made I was increase the amount that I was making for my monthly Kiva funds topups. I’m now an employee of LzLabs Canada (3 of 5 at the time of the incorporation), but since we don’t have an IBM style employee charitable fund, I am still putting funds into Kiva that I used to put into explicit registered charities.

I quite like Kiva as an alternative to standard charity. For one, it isn’t straight up charity, since I can choose to fund people who look like they are trying to improve their condition. That’s a sustainability difference that I think is very important, and part of the trap of the welfare system. If you reward welfare recipients by providing it unconditionally as we do, you create the welfare state. Most of my Kiva loans have specifically targeted individuals who have some sort of business venture that they are trying to improve. My preference has been for people that want tools or livestock (example: a milk producing cow) that will continue to provide value long after the loan is paid.

Its fun to be able to specifically choose who my funds are going to, and when the loan repayments come in, I can often recycle those repayments directly into a new loan without even waiting for my next top up period.

I don’t think that the default overhead that Kiva wants for each loan is reasonable ($3 on $25), so I lower that significantly each time. Note that if the loan that you try to fund doesn’t get the backers required, Kiva keeps that overhead donation amount. When I recycled funds after such an unfunded loan into a new loan, I explicitly set the corresponding Kiva donation amount to zero.

Unfortunately, I don’t think I can get a Canadian charitable tax credit for the sort of permanently recycling Kiva loans that I am doing, but it’s fun enough to see my loan portfolio grow that I don’t care too much about the tiny little tax kickback Uncle Trudeau and Aunt Wynne “give me” in exchange for me financing their spending sprees.